Bar-Code-Scanner Makers File Suit against Lemelson Foundation

Seven manufacturers of bar-code scanning and printing equipment have jointly filed suit in federal district court in Nevada against the Lemelson Medical, Education and Research Foundation LP, which holds patents on bar-code-reading and machine vision technology. The suit seeks to declare the patents invalid and unenforceable.

Leonard H. Goldner, senior vice president and general counsel for Symbol Technologies Inc. in Holtsville, N.Y., one of the seven firms, said the companies filed suit to protect their customers, who have received letters from the Lemelson partnership since the beginning of the year, requesting licensing fees for use of the technology.

"I believe the Lemelson [partnership] contacted over a thousand companies," Goldner said, including major retailers, airlines and other customers who use bar-code scanning and reading as part of their business.

No end in sight

The Lemelson partnership asserts that its patents cover the process of bar-code scanning and the use of the collected data. Goldner said customers are indemnified against patent infringement claims on the equipment but not on the way in which it is used. He said Lemelson is asking retailers for $1 million in licensing fees per $1 billion to $2 billion in sales.

As customer companies began reporting contacts from the Lemelson partnership, manufacturers began to plan the joint law suit.

"We wanted this [suit] to be an industry effort," Goldner said. "There were other companies that decided not to join. We asked perceived leaders, and a number of them felt it was not time to be involved, although all applauded our efforts. With one or two exceptions, we have the leaders of the industry."

Lemelson partnership attorney Louis Hoffman dismissed the suit as a customer relations ploy. "They are creating a dispute on their own behalf," Hoffman said. "They are doing this for press relations."

If the patents are upheld, Goldner said, bar-code users will likely pay up as the productivity gains from the technology make it unthinkable to do without.

Some of the retailers, including Home Depot in Atlanta, have already agreed to licensing settlements, Hoffman said.